20 MARCH 2017


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Article from BTNews 20 MARCH 2017

Alitalia faces 1bn cost cuts

A €1bn cut in costs, a big fleet reduction by 20 narrow-body aircraft and profitability by 2019 are elements in the next phase of Alitalia’s business plan, covering the next four years. The plan was heralded earlier this year (BTN 9 January).

Approved by the airline’s board on Wednesday, the turnaround document was described as including “a range of radical and necessary measures across the whole of the company to stabilise it and secure its long-term sustainability”.

Funding by the company’s shareholders is subject to unions agreeing a new collective works agreement and related measures. Management is due to hold talks after presenting the plan to the Italian government.

Alitalia said it aims to reduce operating and manpower costs by €1bn in the first three years of the plan and to increase revenues, also by 2019, by 30% – from €2.9bn to €3.7bn.

“These financial performance indicators are judged to be realistic and achievable by independent advisers and the projected figures would turn Alitalia into a profitable business by 2019,” a statement said.

CEO Cramer Ball said: “The aviation industry is ferociously competitive and never stands still. Only through radical change will Alitalia’s fortunes be turned around.”


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